Trumponomics
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Just before leaving for the G 7 meeting, Trump named EU and Canada and tweeted: "Take down your tariffs &
barriers or we will more than match you!" After hurling a series of accusations, on blocking US goods with
barriers, Trump kind of signed off saying: "Looking forward to straightening out unfair Trade Deals with the G
7 countries. If it doesn't happen, we come out even better!"
India is in the crosshairs, too. Commerce Minister Suresh Prabhu is set to meet US Trade Representative
Robert Lighthizer next week in Washington-the quip among negotiators is whether a Prabhu-Lighthizer pact
can be binding on Trumponomics. The headline optics is about zero duties for Harley Davidson bikes and the
curbs on spouses of IT professionals in the US on H1B visas. The battle is bigger and more complex
On June 19, the USTR is convening a public hearing to review India's eligibility for GSP or generalized system of
preference that enables market access at low tariffs, specifically for dairy products, medicines, and over 3,000
other products. The action has been prompted by representations from the politically powerful National Milk
Producers Federation and the US Dairy Export Council, and from the Advanced Medical Technology
Association on pricing and access.
India and the US are locked in combat at the WTO. The US has brought seven cases against India. These
include patent protection for pharma and chemical products, quantitative restrictions on imports of agri,
textile and industrial products, measures impacting investment in the auto sector, additional duties on
imports from the Us, conditions imposed on import of agri products, solar cells, solar modules, and export
related issues
AMAN SHARMA

Trumponomics
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India has filed 11 cases against the US at the WTO. These include measures affecting import of women's
woollen coats, shirts and blouses, import prohibitions on shrimp products, anti-dumping and countervailing
measures on steel plates, rules of origin for textiles and apparels, measures on hot-rolled carbon steel,
measures concerning non-immigrant visas, solar panels and steel and aluminium products.
.
.Behind the fusillade of name-calling, accusations and braggadocio there is a political message. The focal point
of all rhetoric is to convince those who voted for him that he is on the job. The denial of climate change, the
revival of coal, the targeting of EU and Canada on agricultural products, and of China and India on market
access and IPR violations are par for the course.
.There is also a method. Trump is deploying existing provisions in US laws to influence outcomes on trade deals
and even investments. On May 23, 2018, the Secretary of Commerce, under Section 232 of the Trade
Expansion Act of 1962, initiated investigations to determine the effect of imports on national security and
possible weakening of the national economy. The probe is also looking at domestic production of automobiles
and auto parts. One intriguing issue being examined is "Whether and, if so, how the analysis of the above
factors changes when US production by majority US-owned firms is considered separately from US production
by majority foreign-owned firms." The question about this distinction merits the attention of the government
and Indian investors.
AMAN SHARMA

Trumponomics
TOPIC IN NEWS
At another level there is continuation of probes and documentation. India has been placed on the "priority
watch list" for successive years-in the 2015, 2016, 2017 and the 2018 Special 301 Report put out by the
USTR and finds mention on multiple issues at multiple places. And there are issues ranging from IPR
protection to patents to counterfeit products. For instance, the 2018 Report says: "The United States notes its
particular concern with the proliferation of counterfeit pharmaceuticals that are manufactured, sold, and
distributed in numerous trading partners, including China, India, Indonesia, and Thailand".
.
.India has argued and recorded rebuttals about duties being below bound rates as per WTO agreements. But
Trump campaigned and came to power with a firm belief that all trade agreements are ranged against US
interests. This is validated by his political rejection of Nafta or the Trans-Pacific Partnership. His disdain for
multilateral institutions like WTO is well-known, as is his scepticism about international rules-based systems.
The Trumponomics of trade is based on the precept of size matters-basically leverage of market size to the
tune of America First.
AMAN SHARMA

Trumponomics
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Trumponomics is aligned to Trump's politics. The cause of his political constituency matters and there is little
room for doubt, for instance if higher steel tariffs could result in job losses in user industries. Or that the
history of trade wars shows there are no winners. In the age of autonomous technology he is frequently
setting his own GPS or geo political strategy, and at odds with his own administration.
.The spectre of trade wars is looming large. The trade-off with Trumponomics is a complex cocktail of
geopolitics and economics. India needs to look for out-of-the-box tactics and a strategy ranging from political
leverage of market size and access to usage of geopolitical countervailing measures. Carl Jung once said: "In all
chaos there is a cosmos, in all disorder a secret order". Deciphering it is the challenge.
AMAN SHARMA